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CHAPTER-I

INTRODUCTION

1.1 INTRODUCTION

Employee empowerment is defined as the ways in which organizations provide their employees
with a certain degree of autonomy and control in their day-to-day activities. This can include
having a voice in process improvement, helping to create and manage new systems and tactics,
and running smaller departments with less oversight from higher-level management. A key
principle of employee empowerment is providing employees the means for making important
decisions and helping ensure those decisions are correct. When deployed properly, this should
result in heightened productivity and a better quality of employee work and work life.

Employee empowerment varies based on an organization's culture and work design. However,
empowerment is based on the concepts of job enlargement and job enrichment. Job enlargement
differs from job enrichment in that job enlargement is horizontal expansion and job enrichment is
considered vertical.

Job enlargement: Changing the scope of the job to include a greater portion of the horizontal
process.
Example: A bank teller not only handles deposits and disbursement, but also distributes
traveler's checks and sells certificates of deposit.
Job enrichment: Increasing the depth of the job to include responsibilities that have
traditionally been carried out at higher levels of the organization.
Example: The teller also has the authority to help a client fill out a loan application, and
to determine whether or not to approve the loan.

Many managers feel that their passion is not echoed thought the organization. They complain
that staffs are coming to work late, leaving early, and not completing tasks on time, taking
more days off due to illness and complying about all the new plans for future. Employees are
totally frustrated by the lack of enthusiasm, low morale; suspicion and general apathy that
surround the employees should be jumping for joy because they have a job. Employees in
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many businesses carry out at only 10-25 percent of their capacity. Others may be working flat
out but not realizing much for their hard work except for a high level of stress and job burnout.
When arising in performance is desired, as Charles handy has observed, a redoubling of effort
is often the result. Unfortunately the efforts are often wrongly placed and fail to achieve
decided objectives. This can be due to the information that is irrelevant or unreachable and
unrealistic objectives, even though have skills and personal competencies that are necessary for
successful performance and attain satisfaction. The world of work is shifting so fast that
employees are anguishing from low job satisfaction, poor morale, stress, absenteeism and poor
job performance. There will be no letting up on the pressure to perform at work. When people
are given a repetitive job, which is too small for them, they become bored, uninterested and
probably make costly errors. Over a long period of time people can become resentful and
depressed. Others turn to outward expression of hostility and may even damage equipment and
sabotage production. Mounting evidence from studies of job satisfaction and stress at work
supports this view. Many of these problems come from treating people simply as machine that
has to complete a specific task in a given period. Much managerial work is conducted at
breakneck peace, a peace that may even have a clear direction but is passed out at a fur ion rate
that is a rate that may have an unpredictable pattern and comes in fits and starts. Planting
people to these occupational conditions makes demands on them that they have little control
over and are ill- prepared to deal with. Work itself should be the arena for the personal
satisfaction and vibrant performance of people. If you accept anything less you will get less.
Simply expecting employees to be happily, contended and outstanding at work, whatever they
do is wishful thinking. Being clear about people have to achieve at work is important. People
and organizations need to know the direction they are travelling in. but equally, if they are band
of unwilling travelers, they will be a drag on the direction of the organization. The obvious is
that people are the sources of all success. By creating the conditions for significant personal
learning amongst employees in the organization, the likelihood of its success is increased. It
requires management commitment and practical counseling skills that facilitate and empower
employees to deal with their problems at work and to make that most of them in their
organizational employee satisfaction. Empowered employees strongly believe that their task are
significant, they have significant freedom in deciding how to command and manage
organization and they each touch a whole recognize piece of work. Empowerment provides for
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a more efficient, costefficiency kind of control than command and manages organization,
argues Jim Durcan(1974). Hence empowerment motivates people from inside. Money is
important but is not the sole or primary criterion influencing employee motivation. Job
satisfaction, opportunity to develop new skills, decision making etc are often equal to financial
rewards in employee scale of standards. But empowerment is relatively a new concept in India.
Studies, of course, have been made on the effect of motivation from sources other than
empowerment. Hence the motivational aspects of empowerment in Indian condition become an
interesting topic for research.

Importance of Human Resources

The human resource is, of all resources delegated to man, the most productive, the most
versatile and the most resourceful. Human resources constitute the most important and
indispensible constituent in any economy. Their uniqueness renders it basically impossible to
alternate them with any other reason, however important it might be, as nobody can match the
human mind in working out astonishing sensations at times. Hence human resource world have
come to claim “a dominant importance in organizing of human resources”. The human factor
comprises skills, aptitude, knowledge and innovative strength protect in human minds
concerned in a particular organization. An observation made by Adam Curle in this regard is
that a country’s under development is a direct consequence of the under development of its
nation. Additionally, “the dissimilarity in the height of economic growth of the countries is
largely a reflection of differences in the brilliance of their human resources.” The key
ingredient in this proposition is that values, attitudes general direction and value of the people
of a kingdom choose its financial progress.

Human resource development in financing

HRD is a nonstop process to guarantee the expansion of employee competencies, dynamics,
motivation and effectiveness in a systematic and planned manner. The idea of HRD is gaining
widespread currency in India as well as several other developing countries of the world. Some
pursue it like Zealots, while curtain others see it as the current fad in management circles,
which must be trailed to keep up with the Joneses. Yet, there are shutter others who see it with
absolute distrust. However idea is still developing and taking shape, it is not fair to delimit its
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scope and coverage. The HRD movement in banks is gradually building ahead. A majority of
the banks have setup separate HRD departments (HRDDs) within a decade of functioning;
HRDDs in some banks have gained certain creditable success. The comprehensive criticism of
the presenting HRD function as “Ornamental Appendages” cannot be justified. On the other
hand, it is true that HRDDs functioning in a majority of the banks is far from satisfactory.
There are many banks, along with training; assured other activities like manpower planning and
performance appraisal have been introduced. Yet, some other banks have made rapid strides as
far as the introduction of new HRD activities and sub-systems, such as methodical training,
quality circles and staff meetings are concerned. Besides introducing these systems, some
banks have also taken significant efforts in perfecting certain systems like training and
performance appraisal. Nevertheless, there is a broad spread feeling in banking industry that
there are no sufficient pay off from the HRD functions and system at the operational level are
regulated to level of rituals.

Process

Empowerment is the process of obtaining basic opportunities for marginalized people, either
directly by those people, or through the help of non-marginalized others who share their own
access to these opportunities. It also includes actively thwarting attempts to deny those
opportunities. Empowerment also includes encouraging, and developing the skills for, self-
sufficiency, with a focus on eliminating the future need for charity or welfare in the individuals
of the group. This process can be difficult to start and to implement effectively.

Strategy

One empowerment strategy is to assist marginalized people to create their own nonprofit
organization, using the rationale that only the marginalized people, themselves, can know what
their own people need most, and that control of the organization by outsiders can actually help
to further entrench marginalization. Charitable organizations lead from outside of the
community, for example, can disempower the community by entrenching a dependence charity
or welfare. A non-profit organization can target strategies that cause structural changes,
reducing the need for ongoing dependence. Red Cross, for example, can focus on improving
the health of indigenous people, but does not have authority in its charter to install water-
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delivery and purification systems, even though the lack of such a system profoundly, directly
and negatively impacts health. A non-profit composed of the indigenous people, however,
could ensure their own organization does have such authority and could set their own agendas,
make their own plans, seek the needed resources, do as much of the work as they can, and take
responsibility – and credit – for the success of their projects (or the consequences, should they
fail).The process of which enables individuals/groups to fully access personal or collective
power, authority and influence, and to employ that strength when engaging with other people,
institutions or society. In other words, "Empowerment is not giving people power, people
already have plenty of power, in the wealth of their knowledge and motivation, to do their jobs
magnificently. We define empowerment as letting this power out."[8] It encourages people to
gain the skills and knowledge that will allow them to overcome obstacles in life or work
environment and ultimately, help them develop within themselves or in the society. To
empower a female "...sounds as though we are dismissing or ignoring males, but the truth is,
both genders desperately need to be equally empowered." Empowerment occurs through
improvement of conditions, standards, events, and a global perspective of life.

Criticism

Before there can be the finding that a particular group requires empowerment and that therefore
their self-esteem needs to be consolidated on the basis of awareness of their strengths, there
needs to be a deficit diagnosis usually carried out by experts assessing the problems of this
group. The fundamental asymmetry of the relationship between experts and clients is usually
not questioned by empowerment processes. It also needs to be regarded critically, in how far
the empowerment approach is really applicable to all patients/clients. It is particularly
questionable whether [mentally ill] people in acute crisis situations are in a position to make
their own decisions. According to Albert Lenz, people behave primarily regressive in acute
crisis situations and tend to leave the responsibility to professionals. It must be assumed,
therefore, that the implementation of the empowerment concept requires a minimum level of
communication and reflectivity of the persons involved.
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1.2 INDUSTRY PROFILE

The growth in the Indian Banking Industry has been more qualitative than quantitative
and it is expected to remain the same in the coming years. Based on the projections made in the
"India Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report
forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate. The
total assets of all scheduled commercial banks by end-March 2010 is estimated at Rs 40,90,000
crores. That will comprise about 65 per cent of GDP at current market prices as compared to 67
per cent in 2002-03. Bank assets are expected to grow at an annual composite rate of 13.4 per
cent during the rest of the decade as against the growth rate of 16.7 per cent that existed between
1994-95 and 2002-03. It is expected that there will be large additions to the capital base and
reserves on the liability side. The Indian Banking industry, which is governed by the Banking
Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled
banks and scheduled banks. Scheduled banks comprise commercial banks and the co-operative
banks. In terms of ownership, commercial banks can be further grouped into nationalized banks,
the State Bank of India and its group banks, regional rural banks and private sector banks (the
old/ new domestic and foreign). These banks have over 67,000 branches spread across the
country. The Public Sector Banks(PSBs), which are the base of the Banking sector in India
account for more than 78 per cent of the total banking industry assets. Unfortunately they are
burdened with excessive Non-Performing assets (NPAs), massive manpower and lack of modern
technology. On the other hand the Private Sector Banks are making tremendous progress. They
are leaders in Internet banking, mobile banking, phone banking, ATMs. As far as foreign banks
are concerned they are likely to succeed in the Indian Banking Industry. In the Indian Banking
Industry some of the Private Sector Banks operating are IDBI Bank, ING Vyasa Bank, SBI
Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks from the Public
Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank
among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank
are some of the foreign banks operating in the Indian Banking Industry. As far as the present
scenario is concerned the Banking Industry in India is going through a transitional phase. The
first phase of financial reforms resulted in the nationalization of 14 major banks in 1969 and
resulted in a shift from Class banking to Mass banking. This in turn resulted in a significant
growth in the geographical coverage of banks. Every bank had to earmark a minimum percentage
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of their loan portfolio to sectors identified as “priority sectors”. The manufacturing sector also
grew during the 1970s in protected environs and the banking sector was a critical source. The
next wave of reforms saw the nationalization of 6 more commercial banks in 1980. Since then
the number of scheduled commercial banks increased four-fold and the number of bank branches
increased eight-fold. After the second phase of financial sector reforms and liberalization of the
sector in the early nineties, the Public Sector Banks (PSB) s found it extremely difficult to
compete with the new private sector banks and the foreign banks. The new private sector banks
first made their appearance after the guidelines permitting them were issued in January 1993.
Eight new private sector banks are presently in operation. These banks due to their late start have
access to state-of-the-art technology, which in turn helps them to save on manpower costs and
provide better services. During the year 2000, the State Bank Of India (SBI) and its 7 associates
accounted for a 25 percent share in deposits and 28.1 percent share in credit. The 20 nationalized
banks accounted for 53.2 percent of the deposits and 47.5 percent of credit during the same
period. The share of foreign banks (numbering 42), regional rural banks and other scheduled
commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent respectively in
deposits and 8.41 percent, 3.14 percent and 12.85 percent respectively in credit during the year
2000.

1.3 COMPANY PROFILE

SSM Finance and Realty group established in the year 2004, the SSM Groups,
comprising 50 Branches and Service Centres, in India's premier financial services chain. This
company is the largest player in Truck Financing and Chit funds in the Indian subcontinent. The
group, having an annual turnover of Rs. 6,000 crore (USD 1.3 billion), has a significant presence
in the Insurance Consultancy, Consumer Durable Finance and Stock Broking businesses. It also
have diversified investments in areas such as Information Technology, Pharmaceuticals, Property
Development, Project Engineering, Packaging and Auto Components. It employ over 350
employees across the countries that are committed to providing excellent customer service. It
also have over 750 agents nationwide who reach out to its customers in even the most remote
areas. The SSM Group's business ventures are built on providing the most efficient and
customer-focused services based on the simple principle of putting people first. This 'People
First' business philosophy has earned them unstinted customer loyalty through many generations.
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VISION, MISSION AND VALUES:

Helping create wealth, Empowering people through prosperity, Putting people first. The SSM
Group set out with the objective of reaching out to the common man with a host of products and
services that would be helpful to him in his path to prosperity. Over the decades, the Group has
achieved significant success in executing this objective and has created a tremendous sense of
loyalty amongst its customers. Efficiency in operations, integrity and a strong focus on catering
to the needs of the common man, by offering him high quality and cost-effective products &
services, are the values driving the organization. These core values are deep-rooted within the
organization and have been strongly adhered to over the decades. The group prides itself on its
perfect understanding of the customer. Each product or service is tailor-made to perfectly suit the
needs of the customer. It is this guiding philosophy of putting people first that has brought the
Group closer to the grassroots and has made it the preferred choice for all financing requirements
amongst the customers.

Competitor’s Profile

• Veritas Finance

Veritas Finance Private Limited (Veritas), is focused on meeting the financial needs of the micro,
small and medium enterprises (MSME) in India, which has remained largely underserved despite
several initiatives. A company run by professionals with rich experience in financial services
industry, aims to make availing credit easy to this segment and make a positive impact on the
lives of millions of Indians engaged in informal activities and who actually build the nation.

• Muthoot Finance Ltd

Muthoot Finance Ltd. is an Indian financial corporation and the largest gold loan NBFC in the
country. In addition to financing gold transactions, the company offers foreign exchange
services, money transfers, wealth management services, travel and tourism services, and sells
gold coins.

• LT Finance

L&T Finance Holdings Ltd. (LTFH) is a financial holding company offering a focused range of
financial products and services across rural housing and wholesale finance sectors as well as
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mutual fund products and wealth management services through its wholly-owned subsidiaries
viz. L&T Finance Ltd.

• MM Finance

Mahindra & Mahindra Financial Services Limited is a rural NBFC headquartered in Mumbai,
India. It is amongst the top tractor financers in India and offers a wide range of financial products
to address varied customer requirements.

1.4 PRODUCT PROFILE

Types of loans offered by SSM Finance

SI.NO Loan Type Interest Rate

1 Housing Loan 8.5% per month

2 Education Loan 12 % per Month

3 Gold Loan 15% above

4 Vehicle Loan 15% above

5 Business Loan 18% per month

6 Personal Loan 15% per month